Kuwait's Central Bank Governor on Tuesday played down effects of the Dubai debt crisis on his country's banking sector, saying that the impacts "are very limited."

Sheikh Salem Abdulaziz Al-Sabah said his assessment was based on the central bank's preliminary examination of the conditions of local banks after the debt woe emerged, the official KUNA news agency reported.

Addressing an extraordinary session of the cabinet, he assured that conditions of the local banks were "sound," said the report.

The central bank governor said a day earlier that only two local banks were involved in the debt issue, with Al-Ahli Bank of Kuwait has US$20 million in bonds for Nakheel and the Gulf Bank has US$28 million in unfunded risk participation for Dubai World.

On November 25, Dubai World and its main property subsidiary Nakheel asked for a six-month standstill on US$59 billion in debts, which caused wide-spread panic and worries in the financial sector across the world.

In response, the United Arab Emirates (UAE)'s central bank on Sunday established an emergency facility to aid bank liquidity, but development of the crisis was being closely watched as fears of another wave of financial crisis accumulated.

Dubai is one of the seven emirates that make up the UAE and boasts mushrooming skyscrapers and fast growing financial muscles in recent years.

(Xinhua News Agency December 2, 2009)